FACELESS ASSESSMENT INCOME TAX- CHALLEGES FACED BY TAX PAYERS
To bring more transparency in the Income Tax Assessment procedure and remove the physical interaction of taxpayers and the tax department and thereby reduce the menace of corruption, the Government has introduced an e-assessment scheme earlier. It has introduced Faceless Assessment Scheme 2020, and a new section 144B has been inserted under the Income Tax Act.
The new scheme proposes a faceless income tax assessment through a centralized National Faceless Assessment Centre (‘NFAC’).
Some important features of the new Faceless Assessment Scheme 2020
a) Single point of contact has been introduced in the National Faceless Assessment Centre (‘NFAC’). All communication between the assessee and Income Tax Officer shall be via NFAC.
b) Multiple parties would be involved in the entire Faceless Income tax Assessment i.e Assessee, NFAC, assessment units to which NFAC would assign assessment matters through an automatic electronic procedure, Technical units for the assistance of any technical matter, review units and finally, the dispute resolution panel.
c) No single Income Tax Officer would be having discretionary or unlimited power as was prevalent in the earlier scheme; this will increase the confidence of taxpayers in the system.
d) There has been tremendous use of technology, and a lot of exchange of information and communication is there between various parties before the final assessment order will be passed.
e) Right of taxpayers to ask for virtual hearing via video conferencing and video calling has been permitted subject to fulfilment of certain conditions.
f) Despite the best intention of the Government because the scheme is newly introduced, there is a lack of bandwidth and understanding amongst both the tax department and taxpayers, and procedural lapses are bound to happen.
Some of the common problems/challenges which taxpayers are facing under Faceless Assessment are as under:
However, this is the right given under section 144B of the Act. 1) The request of the assessee for personal hearing via video conferencing has not been accepted by the Income Tax Authorities under the new faceless assessment scheme. In the case of Piramal Enterprise Limited, the assessee has filed a writ petition in the High Court challenging that the assessment order has been passed without granting an opportunity of virtual hearing.
2) The request for adjournment made by taxpayers are not accepted, and assessment orders are passed ignoring the request for adjournment. This may be due to technical problems with the portal or due to a shortage of human resources.
3) Income Tax grievance helpline numbers provided to the assessee never works. Neither do they reply over the phone, nor do they reply via emails. This is quite frustrating for any taxpayer. Proper accountability should be fixed in case taxpayers confidence needs to be restored on such helpline numbers.
4) The notices are issued without giving sufficient time to reply to such notices.
5) Even when the assessee files reply to a particular notice, the same questions are again asked in subsequent notices, which is a waste of time for the assessee and the tax department.
6) It has been observed that tax officials are not following the right granted to the assessee as per the taxpayer’s charter, which is against the principle of natural justice.
7) Time and resources of both the taxpayers and assessee and judicial courts are wasted, which may be avoided
8) Conducting the Income Tax faceless assessment in an arbitrary manner and haste
It is the need of the hour that tax authorities should be more generous and exercise more constraint while conducting Income Tax Faceless assessment. Minor mistakes of the assessee and procedural lapses may be avoided at the initial stage.
In this regard, CBDT may also come out with standing instructions for tax officials and taxpayers so that the new Income Tax Assessment scheme is implemented in a hassle-free manner and achieve the purpose for which it was introduced.
